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Maximizing RevPAR Through Artificial Intelligence.

A Look Into The Future of Hospitality Marketing

John Hach

Senior Industry

Analyst

October 25th, 2016

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Artificial Intelligence and HoteliersDoes this look like the future?

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To look into the future…. We must first look into the past

The ‘Then” of Travel OTA E-commerce

A Supermarket of Rates

The paradox of choice

11/2/2016 5

“I want to travel, but can’t find a place to make a reservation.”

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Making the

AI Case

FIVE

KEY DRIVERSin the hospitality

industry

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4

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Fragmentation in the

booking process

Consolidation and

significant new players

OTAs continue

to grow

Complete usage of BIG

DATA is becoming the differentiator

Global consumers an

essential part of the mix

Fragmentation in

the booking process:1

FRAGMENTATION IN

THE BOOKING PROCESS

Average conversion within booking engines is between 1-4% so that means you can expect:

abandonment

It sounds terrible…But it is really our

biggest opportunity.

Consolidation and significant

new players:2

CONSOLIDATION /

SIGNIFICANT NEW PLAYERS

Consolidation continues with stronger players

Now powered by:

OTAs continue to

take a grip:32Consolidation and significant new players:Consolidation and significant

new players:2

New Entrants / New Challenges

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– Priceline rapidly expanding it’s family of companies and diversifying into related areas

Consolidation and significant

new players:2

– Google aggressively testing the water to get the right model in travel and tourism

– Recently launched early AI for research to purchase process with “Destinations” on mobile

Consolidation and significant

new players:2

– Oracle evolving property management systems by purchasing Micros

Consolidation and significant

new players:2

OTAs continue to

take a grip:3

OTA Growth Continues

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Big Data Now4

BIG DATA

has become the differentiator

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Pace Variance – 12 month Outlook

June July August September October

Total -4.4% -3.6% -2.8% -2.3% -1.2%

Group -31.0% -10.6% -16.7% -7.8% -8.5%

Transient -0.9% 0.2% 0.1% -1.3% 1.2%

-40%

-30%

-20%

-10%

0%

10%

20%

Varian

ce %

vs Last Ye

ar

Global consumers an essential part of the mix5

GLOBAL CONSUMERS Reaching

them provides competitive advantage

They are starting to book independently as confidence grows and reciprocal visa restrictions are lifted

Global consumers an essential part of the mix5

Arabic, Chinese, Russian, Brazilian and Indian are all significant in value

Need to have a robust multi-lingual, content-relevant approach to both acquisition and conversion

Global consumers an essential part of the mix 5

Need to have differentiated marketing approaches

Global consumers an essential part of the mix5

90%By 2018of web traffic

will be video

The digital world

is changing:

Distribution is more

complex, and consumers

have more choices than

ever before. Standing out

from the crowd is key!

Video content on your site

helps differentiate it from

the OTA sites driving web

direct bookings.

New competitors like Airbnb

are using video

technologies to their

advantage.

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To drive high volume, qualified traffic to your website, we

need to select the right channels throughout the purchasing

funnel

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Branding (Awareness)• Target Audience: “Researcher”

• Advertising Vehicle: Premium Sites

Brand Engagement (Interest)• Target Audience: “The Intender” & “Price

Comparison Shopper”

• Advertising Vehicle: Behavioral / Contextual Display

Direct Response (Desires/Action)• Target Audience: “Decision Maker”

• Advertising Vehicle: Organic Search/Paid Search

• Target Audience: “Site Abandoner”

• Advertising Vehicle: Remarketing

Awareness (Branding)

Interest (Brand engagement)

Desires/Action (Direct Response)

Action (User Retention)

Brand Search

Geo targeted Search/SEO

Behavioral/Contextual Display

Premium Sites

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WHERE a customer abandons points to strategic solutions

date selection rate / room selection checkoutenhancements

abandonment rate abandonment rate abandonment rate abandonment rate

These solutions can point to a new and engaging opportunity for your web sites.

Preparing

for

The Future

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Understanding the evolution of Artificial IntelligenceFrom transaction processing into machine learning

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Let’s take a closer look at current state

Thank you, feel free to contact us at:

Ryan Brough, Director of Sales

rbrough@travelclick.com